SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[_]Confidential, for Use of the
[_]Preliminary proxy statement Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Cable Design Technologies Corporation
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Cable Design Technologies Corporation
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X]No fee required
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not applicable
(2) Aggregate number of securities to which transaction applies:
Not applicable
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:/1/
Not applicable
(4) Proposed maximum aggregate value of transaction:
Not applicable
(5) Total fee paid:
Not applicable
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
- --------
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
CDT [LOGO]x
CABLE DESIGN TECHNOLOGIES
CABLE DESIGN TECHNOLOGIES
Foster Plaza 7 . 661 Andersen Drive Paul M. Olson
Pittsburgh, PA 15220 . (412) 937-2300 President/Chief Executive Officer
November 4, 1999
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders on Tuesday, December 7, 1999 at 10:00 A.M.,
eastern standard time. The meeting will be held at The Double Tree Hotel, 1000
Penn Avenue, Pittsburgh, Pennsylvania 15222.
The matters scheduled to be considered at the meeting are the election of
directors and the election of an auditor for the Company. These matters are
more fully explained in the attached Proxy Statement, which you are encouraged
to read.
The Board of Directors values and encourages stockholder participation. It
is important that your shares be represented, whether or not you plan to
attend the meeting. Please take a moment to sign, date and return your Proxy
in the envelope provided even if you plan to attend the meeting.
We hope you will be able to attend the meeting.
Sincerely,
/s/ Paul M. Olson
Paul M. Olson
President and Chief Executive
Officer
Innovative Connective Technology
[LOGO] CABLE DESIGN TECHNOLOGIES
CABLE DESIGN TECHNOLOGIES CORPORATION
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
Notice is hereby given that the Annual Meeting of Stockholders of Cable
Design Technologies Corporation (the "Company") will be held at The Double
Tree Hotel, 1000 Penn Avenue, Pittsburgh, Pennsylvania 15222 on Tuesday,
December 7, 1999, at 10:00 A.M., eastern standard time, for the following
purposes:
1. To elect six directors to serve until the next Annual Meeting of
Stockholders;
2. To elect an Auditor for the Company for the ensuing year; the Board of
Directors of the Company has recommended Arthur Andersen LLP, the present
Auditor, for election as Auditor; and
3. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
In accordance with the provisions of the Bylaws, the Board of Directors has
fixed the close of business on October 25, 1999 as the record date for the
determination of the holders of Common Stock entitled to notice of and to vote
at the Annual Meeting.
By order of the Board of Directors
/s/ Charles B. Fromm
Charles B. Fromm
Secretary
Pittsburgh, Pennsylvania
November 4, 1999
CABLE DESIGN TECHNOLOGIES CORPORATION
Foster Plaza 7
661 Andersen Drive
Pittsburgh, Pennsylvania 15220
----------------
PROXY STATEMENT
Annual Meeting of Stockholders
to be Held
December 7, 1999
----------------
November 4, 1999
The Proxy is solicited by the Board of Directors of Cable Design
Technologies Corporation (the "Company") for use at the 1999 Annual Meeting of
Stockholders to be held on Tuesday, December 7, 1999 at 10:00 A.M., eastern
standard time, at The Double Tree Hotel, 1000 Penn Avenue, Pittsburgh,
Pennsylvania 15222. Solicitation of the Proxy may be made through officers and
regular employees of the Company by telephone or by oral communications with
some stockholders. No additional compensation will be paid to such officers
and regular employees for any such Proxy solicitation. Expenses incurred in
the solicitation of Proxies will be borne by the Company.
VOTING MATTERS
The representation in person or by proxy of a majority of the outstanding
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), entitled to a vote at the meeting is necessary to provide a quorum
for the transaction of business at the meeting. Shares can only be voted if
the stockholder is present in person or is represented by a properly signed
proxy. Each stockholder's vote is very important. Whether or not you plan to
attend the meeting in person, please sign and promptly return the enclosed
proxy card, which requires no postage if mailed in the United States. All
signed and returned proxies will be counted towards establishing a quorum for
the meeting, regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on
the proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted for the Board of Director's proposals, and
as the individuals named as proxy holders on the proxy deem advisable on all
other matters as may properly come before the meeting.
For all matters to be voted upon at the meeting other than the election of
directors, the affirmative vote of a majority of shares present in person or
represented by proxy, and entitled to vote on the matter, is necessary for
approval. The directors are elected by a plurality of the votes of the shares
present in person or represented by proxy and entitled to vote in the election
of directors. Withholding authority to vote or an instruction to abstain from
voting on a proposal will be treated as shares present and entitled to vote
and, for purposes of determining the outcome of the vote, will have the same
effect as a vote against the proposal. A broker "non-vote" occurs when a
nominee holding shares for a beneficial holder does not have discretionary
voting power and does not receive voting instructions from the beneficial
owner. Broker "non-votes" will not be treated as shares present and entitled
to vote on a voting matter and will have no effect on the outcome of the vote.
Any stockholder giving the enclosed Proxy has the power to revoke such Proxy
prior to its exercise either by voting by ballot at the meeting, by executing
a later-dated proxy or by delivering a signed written notice of the revocation
to the Secretary of the Company before the meeting begins. The Proxy will be
voted at the meeting if the signer of the Proxy was a stockholder of record on
October 25, 1999 (the "Record Date").
On the Record Date, there were outstanding and entitled to vote at the
meeting 28,217,965 shares of Common Stock. Each outstanding share of Common
Stock is entitled to one vote. This Proxy Statement is first being sent to the
stockholders on or about November 4, 1999. A list of the stockholders entitled
to vote at the meeting will be available for inspection at the meeting for
purposes relating to the meeting.
MATTERS TO BE ACTED UPON
1. Election of Directors
Pursuant to the Bylaws of the Company, the Board of Directors has determined
that the number of directors constituting the full Board of Directors shall be
seven. The Board of Directors recommends that the stockholders vote FOR each
nominee set forth below. Proxies are solicited in favor of the nominees named
on the following pages and it is intended that the Proxies will be voted for
the six nominees. In the event that any of the nominees should become unable
or unwilling to serve as a director, it is intended that the Proxies will be
voted for the election of such other person, if any, as shall be designated by
the Board of Directors. It is not anticipated that any of the nominees will be
unable or unwilling to serve as a director. Each director to be elected will
serve until the next Annual Meeting of Stockholders or until a successor is
elected and shall qualify. Mr. Myron Gelbach has served as a director since
1985 and will retire from the Board of Directors effective immediately
preceding the 1999 Annual Meeting of Stockholders. His seat will remain vacant
until a successor is identified.
Information Regarding Nominees for Election of Directors
A brief statement of the business experience and positions with the Company
for the past five years, a listing of certain other directorships and the ages
(as of September 30, 1999) of each person nominated to become a director of
the Company are set forth on the following pages. There are no family
relationships between any of the directors, nominees and executive officers of
the Company nor any arrangement or understanding between any director or
nominee and any other person pursuant to which he or she was or is to be
selected as a director or nominee.
Bryan C. Cressey, 50, has been Chairman of the Board of the Company since
1988 and a director since 1985. For the past nineteen years he has also been a
General Partner and Principal of Golder, Thoma and Cressey ("GTC") and
Thoma Cressey Equity Partners ("TCEP"), both private equity firms. He is also
a director of Clarion Technologies Inc., a private company, which is
unaffiliated with the Company. Mr. Cressey received a Juris Doctor degree and
a MBA degree from Harvard University.
Paul M. Olson, 65, has been President and a director of the Company since
1985, and Chief Executive Officer of the Company since 1993. From 1972 to 1984
Mr. Olson was the President of Phalo Corporation, a wire and cable
manufacturer, and directed sales and marketing at Phalo Corporation from 1967
to 1972. From 1963 to 1967, Mr. Olson was employed at General Electric and,
from 1960 to 1963, at General Cable, in wire and cable related sales and
marketing positions. Mr. Olson has a B.A. degree in economics from Hobart
College.
George Graeber, 57, has been a director and Chief Operating Officer of the
Company since April, 1998. Between 1992 and April, 1998, Mr. Graeber served in
various other positions with the Company, including Executive Vice President
of the Company and President of Montrose/CDT. From 1990 to 1992 Mr. Graeber
was a Vice President and General Manager of the Energy division of Anixter
International Inc.. Mr. Graeber also was the President of the Industrial
Electronic division of Brintec Corp. and a Vice President of Brand Rex Cable.
Mr. Graeber has a Masters degree in Electrical Engineering from the University
of Connecticut.
Michael F.O. Harris, 61, has been a director of the Company since 1985. For
the past nine years he has also been a Managing Director of NGI, Inc. and The
Northern Group, Inc. ("Northern"), which act as Managing General Partners of
Northern Investment Limited Partnership ("NILP") and Northern Investment
Limited Partnership II ("NILP II"), respectively. NILP and NILP II are
investment partnerships which own several manufacturing companies unaffiliated
with the Company. Mr. Harris has a B.S. degree from Yale University and a MBA
degree from Harvard University.
2
Glenn Kalnasy, 56, has been a director of the Company since 1985. For the
past nine years he has also been a Managing Director of NGI, Inc. and
Northern, which act as Managing General Partners of NILP and NILP II,
respectively. NILP and NILP II are investment partnerships which own several
manufacturing companies unaffiliated with the Company. Mr. Kalnasy has a B.S.
degree from Southern Methodist University.
Richard C. Tuttle, 44, has been a director of the Company since 1989. He is
a Principal of Prospect Partners, L.L.C., a private equity investment firm.
From 1992 to 1997, Mr. Tuttle was an Executive Vice President at Health Care &
Retirement Corp., a publicly traded health care company that is unaffiliated
with the Company. From 1987 to 1992, he was a Principal at GTC, a private
equity investment firm. Mr. Tuttle has a B.A. degree and MBA degree from
Stanford University.
2. Election of Auditors
The Board of Directors recommends that the stockholders vote FOR the
election of the firm of Arthur Andersen LLP as the auditors to audit the
financial statements of the Company and certain of its subsidiaries for the
fiscal year ending July 31, 2000. It is intended that the Proxies in the form
enclosed with this Proxy Statement will be voted for such firm unless
stockholders specify to the contrary in their Proxies or specifically abstain
from voting on this matter.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting of Stockholders. They will have the opportunity to make
statements if they desire to do so and will be available to respond to
appropriate questions.
3. Other Business
The Board of Directors does not know of any other business to be presented
at the Annual Meeting of Stockholders. If any other matters properly come
before the meeting, however, it is intended that the persons named in the
enclosed form of Proxy will vote said Proxy in accordance with their best
judgment.
DIRECTORS MEETINGS AND COMPENSATION
Directors Meetings
The Board of Directors held four regular meetings and eight special
telephonic meetings during the year ended July 31, 1999 ("fiscal 1999"). The
Audit Committee, which currently consists of Myron S. Gelbach and Michael F.O.
Harris, oversees actions taken by the Company's independent auditors,
recommends the engagement of auditors and reviews the Company's internal
audits. The Compensation Committee approves the compensation of executives of
the Company, makes recommendations to the Board of Directors with respect to
standards for setting compensation levels and administers the Company's
incentive plans. The Compensation Committee currently consists of Bryan C.
Cressey and Richard C. Tuttle. There is no standing nominating committee.
During fiscal 1999, each of the Company's incumbent directors participated in
excess of 75% of the aggregate of the meetings of the Board of Directors and
the meetings of committees of the Board of Directors of which such director
was a member, except for Mr. Kalnasy who was present for 67% of the Board of
Director Meetings. During fiscal 1999, the Compensation Committee met, either
in person or by telephonic meeting, two times and the Audit Committee met,
either in person or by telephonic meeting, two times.
Compensation of Directors
Directors who are also officers of the Company do not currently receive
compensation from the Company for their services as directors. Those directors
who are not officers of the Company receive $2,500 quarterly for their
services as directors. All directors are reimbursed for expenses incurred in
connection with their attendance at meetings. Under the Company's Non-Employee
Director Stock Plan (the "Director Plan") each participating director under
such plan is entitled to receive shares of Common Stock annually with a fair
market value of $15,000.
3
GTC and Northern are each party to a consulting agreement pursuant to which
each is paid $50,000 a year in exchange for consulting services rendered to
the Company and its subsidiaries by management personnel of each of GTC and
Northern. Bryan Cressey, a director of the Company, is a General Partner of
GTC, and Michael Harris and Glenn Kalnasy, directors of the Company, are each
a Managing Director and significant stockholder of Northern. As a result,
Messrs. Cressey, Harris and Kalnasy have not previously received the director
fee or stock grant under the Director Plan. The consulting agreements will be
terminated effective October 29, 1999, after which time Messrs. Cressey,
Harris and Kalnasy will be paid the director fee and awarded stock under the
Director Plan.
MANAGEMENT COMPENSATION AND CERTAIN TRANSACTIONS
Summary Compensation Table
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information for Mr. Olson and the four
other most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1999 (collectively, the "named executives").
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
---------------------- ------------
Option Other Incentive
Fiscal Salary Bonus Awards Compensation Payments
Name and Principal Year ($)(1) ($)(2) (#) ($)(3) ($)(4)
Position ------ ------- ------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Olson........... 1999 476,692 232,375 270,000 31,561 1,018,847
President, Chief
Executive Officer 1998 444,210 252,825 -- 28,293 --
1997 366,231 186,721 -- 26,712 --
George C. Graeber....... 1999 310,015 116,250 75,000 26,700 --
Chief Operating Officer 1998 269,442 176,276 -- 26,752 --
1997 242,031 53,657 -- 24,228 --
David R. Harden......... 1999 266,597 146,630 150,000 26,856 949,062
Senior Vice President 1998 256,183 68,129 -- 26,856 --
1997 249,462 107,998 -- 25,304 --
Normand Bourque......... 1999 225,319 273,978(5) -- 20,023 --
Executive Vice
President 1998 226,479 295,943 -- 12,933 --
1997 202,371 333,436 -- 11,957 --
Peter Sheehan........... 1999 237,678 130,717(5) 30,000 24,396 --
Executive Vice
President 1998 210,916 167,415 -- 24,404 --
1997 189,346 75,435 -- 290 --
</TABLE>
- --------
(1)Amounts in this column reflect salaries paid in the applicable fiscal year.
(2) Amounts in this column reflect bonuses paid with respect to the applicable
fiscal year.
(3) Figures in this column include amounts with respect to Company
contributions to the West Penn Wire Division Incentive Profit Sharing Plan
and Trust (the "Incentive Plan") (which is a defined contribution plan)
and term life insurance premiums paid by the Company (both of which
reflect payments made in the 1998 calendar year), which for each of the
named executives other than Mr. Bourque are: Mr. Olson, Incentive Plan
$24,000, term life insurance premium $7,561; Mr. Harden, Incentive Plan
$24,000, term life insurance premium $2,856; Mr. Graeber, Incentive Plan
$24,000, term life insurance premium $2,700; and Mr. Sheehan, Incentive
Plan $24,000, term life insurance premium $396. Figures in this column for
Mr. Bourque represent term life insurance premium, $4,866, and earned
amounts with respect to projected benefits under NORDX/CDT, Inc. defined
benefit plans, $15,157. Assuming continued service with the Company until
age 65, Mr. Bourque's estimated benefits upon retirement under such plans
would be a lump sum payment of $180,411 upon retirement and an annual
benefit of $25,345.
(4) Represents one-time incentive payments to certain members of senior
management made in connection with the Company's repurchases of common
stock received by such members of senior management upon the exercise of
incentive stock options which entitled the Company to a tax benefit of
approximately $12.8 million.
4
(5) Participants, participation percentages and the bonus pool amount under
the "Plan II Bonus" described in "Compensation Committee Report--NORDX/CDT
Bonus Programs" have not been determined and amounts payable to Messrs.
Bourque and Sheehan under such Plan for fiscal 1999 have not been
included.
Option Grants in Fiscal Year 1999
The following table shows information regarding the grant of stock options
during fiscal 1999 to the named executives.
Individual Grants
<TABLE>
<CAPTION>
Potential Realizable Value
Number of % of Total at Assumed Annual Rates
Securities Options of Stock Price Appreciation
Underlying Granted to Exercise for Option Term
Options Employees in Price Expiration ---------------------------
Name (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- ---------- ------------ -------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Olson........... 200,000(1) 10.8% $20.750 4/23/09 -- 1,774,000
70,000(2) 3.8% $14.063 6/11/09 543,025 1,336,825
George Graeber.......... 75,000(2) 4.1% $14.063 6/11/09 581,813 1,432,313
Dave Harden............. 150,000(1) 8.1% $20.750 4/23/09 -- 1,330,500
Peter Sheehan........... 30,000(2) 1.6% $14.063 6/11/09 232,725 572,925
</TABLE>
- --------
(1) Such options were granted on April 23, 1999 and vest in 33 1/3%
installments on the first, second and third anniversaries of the grant
date and will vest earlier in the event of either (a) retirement after age
65 or (b) a change of control (as defined in the option).
(2) Such options were granted on June 11, 1999 and vest in 20% installments on
the first, second, third, fourth and fifth anniversaries of the grant
date. In the event of a change of control, to the extent the Company's
Board of Directors does not vest the unvested options, the Board may
provide for the options to be exchanged for an option of the acquiring
company (with appropriate and equitable adjustments). If in connection
with or following such change of control the option holder's employment is
terminated for other than for cause or the option holder terminates his
employment for good reason, 50% of the unvested options would vest if the
employment is terminated within the first year following the change of
control and 100% if termination occurs thereafter.
5
Option Exercises and Year End Values for Fiscal Year 1999
The following table shows information regarding the number and value of any
unexercised stock options held by the named executives as of July 31, 1999.
None of the named executives exercised stock options in fiscal 1999.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in the Money Options at
Options at FY-End (#) FY-End ($) Exercisable/
Name Exercisable/Unexercisable Unexercisable(1)
---- ------------------------- -----------------------
<S> <C> <C>
Paul M. Olson............ 0/270,000 $0/$284,375
David R. Harden.......... 0/150,000 $0/$0
George C. Graeber........ 57,558/75,000 $937,735/$304,688
Normand Bourque.......... 131,640/197,460 $0/$0
Peter Sheehan............ 22,500/91,875 $67,770/$308,243
</TABLE>
- --------
<TABLE>
<S> <C>
</TABLE>
(1) Based on the closing price of the Common Stock on July 30, 1999 of $18
1/8.
Employment Agreements
None of the named executives, other than Normand Bourque, have employment
agreements with the Company or any of its affiliates. Pursuant to an
employment agreement between Mr. Bourque and the Company, effective as of
February 5, 1996, Mr. Bourque is entitled to participate in certain bonus
plans and received a stock option grant of 329,100 shares of the Company's
Common Stock. Mr. Bourque is entitled to termination payments if terminated
without cause. Termination pay is based upon Mr. Bourque's prior compensation
and would be paid for a period of 18 months. The Company also entered into
Senior Management Agreements with each of Messrs. Olson and Harden in 1988,
pursuant to which each purchased shares of Common Stock. Mr. Bourque's
employment agreement and the Senior Management Agreements also impose certain
additional restrictions upon the executives, including confidentiality
obligations, assignment of the benefit of inventions and patents to the
Company and a requirement that such executives devote substantially all of
their business time to the Company.
Messrs. Olson, Graeber and Sheehan are also parties to agreements whereby in
the event their employment is terminated other than for cause after a change
of control or they resigned for good reason following a change of control (i)
they would receive an amount equal to 3 times (in the case of Mr. Olson) or 2
times (in the case of Messrs. Graeber and Sheehan) the sum of (a) their
highest annual compensation (excluding bonuses) over the prior 3 calendar
years and (b) their average annual bonus over the prior 3 calendar years and
(ii) be provided health benefits for 2 years following such change of control.
In addition, certain unvested options and other long-term incentives would
vest.
Certain Transactions
The Company purchases converted copper from an entity controlled by family
members of David Harden, an officer of the Company, and purchases, from time
to time, production equipment from a Company controlled by Mr. Harden. In
fiscal 1999, total purchases by the Company from such entities were
approximately $1.2 million. As of July 31, 1999, the Company owed
approximately $100,000 to such entities, consisting of accounts payable
arising in connection with such purchases. With respect to converted copper,
the Company expects to continue to purchase converted copper from such entity
at such level in the foreseeable future. Purchases were made on an "as needed"
basis, and there is no contract relating to such purchases. The Company
believes that the foregoing transactions were consummated on terms no less
favorable than those that could be obtained by the Company from an unrelated
third party in a transaction negotiated on an arms-length basis.
In connection with the hiring of Peter Sheehan in 1995, the Company agreed
to make a loan to Mr. Sheehan to assist in purchasing a home upon his
relocation. The loan balance outstanding as of the beginning of fiscal year
1999 was $66,633.44. The loan has been repaid.
6
Compensation Committee Report
Compensation Policies Applicable to Executive Officers
During fiscal 1999, the Compensation Committee continued to follow
established compensation policies. The compensation program for salaried
employees has been designed and is administered to ensure that employee
compensation motivates superior job performance and the achievement of
business objectives. The main policy objective of executive officer
compensation is the maximization of stockholder value over the long term. The
Compensation Committee believes that this can best be accomplished by an
executive compensation program which reflects the following three principles:
First, base salaries should be sufficient to attract and retain qualified
management talent, without exceeding competitive practice at similar
companies in the specialty cable and related industries.
Second, annual bonus and incentive programs should provide opportunity
for significant increases in compensation, based on meeting or exceeding
pre-determined performance targets.
Third, a substantial portion of total long-term compensation should
reflect performance on behalf of the Company's stockholders, as measured by
increases in the Company's stock price.
Except as discussed below with respect to the option grants discussed below,
the Compensation Committee made no fundamental changes in the basic executive
compensation program during fiscal 1999.
Base Salary
The Compensation Committee meets in the fall of each year and is currently
evaluating compensation for fiscal 2000. Annual base salaries of the executive
officers for fiscal 1999 were reviewed by the Compensation Committee at its
October 1998 meeting and adjusted as appropriate effective October 1, 1998.
Following previously stated policies, the Compensation Committee adjusted
salaries based upon competitive salary levels, past individual performance as
measured by both qualitative and quantitative factors and the potential for
making significant contributions to future Company performance. The
Compensation Committee believes that for salary increases to provide a
meaningful additional incentive such increases must exceed the rate of
inflation and, in light of relatively low inflation in the national economy,
the Compensation Committee approved salary increases for fiscal 1999 of
approximately 4% for executive officers at its October 1998 meeting.
Bonus Plan
Each of the named executive officers and certain other key personnel of the
Company participate in an executive/management bonus plan (the "Bonus Plan").
The Bonus Plan provides for annual bonus awards based upon financial results
compared to a projected budget prepared at the beginning of each fiscal year.
Employees at each of the Company's operating units receive bonuses determined
in part by the financial results of their respective division and in part by
the overall financial results of the Company. Other participants, including
the Chief Executive Officer (the "CEO"), receive bonuses based on the overall
financial results of the Company. The individual's Target Bonus ranges from
15% to 65% of base salary, as determined by the Compensation Committee, and
based primarily on the employee's position and place of employment within the
Company. An individual participant's actual bonus is determined as a
percentage ranging from 0% to 200% of the Target Bonus based upon (i) the
relevant performance target(s) achieved, and (ii) the weight given to the
relevant operating unit and overall Company performance targets. Bonus amounts
are prorated for new participants who are added during the course of a given
year. One half of the Bonus Plan bonuses earned are paid quarterly, with the
balance paid after final fiscal year results are available. Bonus payments
under the Bonus Plan are subject to modification at the discretion of the
Compensation Committee. All senior executive/management bonus plans are
approved by the Board of Directors.
7
NORDX/CDT Bonus Programs
Certain employees of NORDX/CDT participate in the NORDX/CDT Plan II Bonus
Program (the "Plan II Program"). The Plan II Program provides for bonus awards
with respect to the six-month period ended July 31, 1996 and annually
thereafter for four years based upon NORDX/CDT's earnings before interest and
taxes. Bonus participants are determined by the President of NORDX/CDT,
currently Mr. Bourque, subject to the approval of the Chief Executive Officer
of the Company, currently Mr. Olson. The bonus amounts of each participating
employee are determined by the President of NORDX/CDT, the Chief Executive
Officer of the Company, currently Mr. Olson, and the Chairman of the Company,
currently Mr. Cressey. Mr. Bourque and certain other key personnel of
NORDX/CDT participate in the NORDX/CDT Signing Bonus Program (the "Signing
Program"). The Signing Program provides for a signing bonus to certain key
personnel of NORDX/CDT of individual aggregates ranging from $300,000 to
$750,000 to be paid over the first five years of such person's employment by
the Company (which commenced in February, 1996).
Stock Options
The Compensation Committee met in March, 1999 to review the Company's option
grant program. The Compensation Committee believes that significant equity
interests in the Company held by the Company's management helps to align the
interests of stockholders and management and maximize stockholder returns over
the long term. The Compensation Committee reviewed option grants over the past
5 years and determined that options had only been issued to new hires and in
connection with acquisitions. Other management had not been issued options
during such period and, in some cases, had not been issued options in 10
years. As a result, many members of management no longer held any options in
the Company, including several of the Company's executive officers. The
Compensation Committee also discussed an annual or other periodic option grant
program.
In April, 1999 the Board of Directors adopted the 1999 Long-Term Performance
Incentive Plan (the "1999 Plan"). At such time, options for 1,007,000 shares
were granted to certain management and other employees, including 200,000 to
Mr. Olson. The exercise price of the options was $20 3/4, despite the then
current market price of $12 1/16 per share of the Company's common stock, with
3-year ratable vesting. The options were issued under the 1999 Plan and the
Company's Supplemental Long Term Performance Incentive Plan (the "Supplemental
Plan").
In June, 1999 the Board reviewed information prepared by management and the
Company's outside counsel, including change of control protections and option
grant programs for peers within the Company's industry. The Board determined
to offer change of control agreements to certain key members of management. In
addition, the Board amended the 1999 Plan to add 500,000 shares to such plan
and granted options to acquire 798,100 shares, including 70,000 to Mr. Olson.
The exercise price of such options was $14 1/16, the closing price of the
Company's stock on the date of issuance. The options have 5-year ratable
vesting. The Board also determined that it or the Compensation Committee
should review option grants on an annual basis.
Shares of Common Stock that remain reserved for grant under the Company's
stock option plans are: for the Long Term Performance Incentive Plan (the
"Long Term Plan"), 36,958 shares, for the Supplemental Plan, 283,375 shares,
and for the 1999 Plan, 101,900 shares.
In order to create and provide an option incentive structure similar to that
for its employees, the Company adopted the Director Plan in 1995. Under this
plan, the Company's outside Directors are eligible to receive shares of Common
Stock in an amount and at a price set by a pre-arranged formula. Under the
Director Plan 101,789 shares of Common Stock remain reserved for grant to the
Company's outside Directors.
8
Compensation of Chief Executive Officer
The compensation policies described above apply as well to the compensation
of the CEO. The Compensation Committee is directly responsible for determining
the CEO's salary level and for all awards and grants to the CEO under the
incentive components of the compensation program. The overall compensation
package of the CEO is designed to recognize that the CEO bears primary
responsibility for increasing the value of stockholders' investments.
Accordingly, a substantial portion of the CEO's compensation is incentive-
based, providing greater compensation as direct and indirect financial
measures of stockholder value increase. The CEO's compensation is thus
structured and administered to motivate and reward the successful exercise of
these responsibilities.
Other than the option grants set forth above and an increase of 4.3% to Mr.
Olson's fiscal 1999 base salary, no changes were made to Mr. Olson's
compensation package.
Internal Revenue Code Section 162(m)
The Compensation Committee has determined that it is unlikely that the
Company would pay any material amounts in fiscal 1999 or fiscal 2000 that
would result in the loss of a Federal income tax deduction under Section
162(m) of the Internal Revenue Code of 1986, as amended, and accordingly, has
not recommended that any special actions be taken or that any plans or
programs be revised at this time in light of such tax law provision. The
Company attempted to allocate its fiscal 1999 option grants among the
Company's equity plans in order to minimize the likelihood of any loss of
federal income tax deduction under Section 162(m) at the time of option
exercise. However, since the 1999 Plan was not subject to a stockholder vote
and, therefore, did not qualify for certain exemptions from Section 162(m),
depending on the appreciation in the Company's stock value and the timing of
stock option exercises, it is possible that, in future periods, some portion
of the appreciation in the Company's stock value may be non-deductible upon
the exercise of options issued pursuant to the 1999 Plan.
Conclusion
Through the programs described above and the stock ownership of management
through options, the Compensation Committee believes that a significant
portion of the Company's executive compensation is linked directly to
corporate performance.
Respectfully submitted,
COMPENSATION COMMITTEE MEMBERS
Bryan C. Cressey Richard C. Tuttle
* * * * * *
9
Performance Graph
The following graph compares the cumulative total return on $100 invested on
July 29, 1994 through July 30, 1999 (the last day of public trading of the
Common Stock in fiscal 1999) in the Common Stock of the Company, the S&P 500
Index and the S&P Electrical Equipment Index. The return of the indices is
calculated assuming reinvestment of dividends during the period presented. The
Company has not paid any dividends since its initial public offering. The stock
price performance shown on the graph below is not necessarily indicative of
future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURNS AMONG CABLE DESIGN TECHNOLOGIES
CORPORATION, S&P 500 INDEX AND
S&P ELECTRICAL EQUIPMENT INDEX
[LINE GRAPH]
Cable Design
Technologies S&P Electrical
Date Corporation S&P 500 Index Equipment Index
- ------- ------------ ------------- ---------------
7/29/94 $100.00 $100.00 $100.00
7/31/95 $169.81 $126.11 $119.44
7/31/96 $330.96 $147.01 $161.35
7/31/97 $385.77 $204.38 $243.23
7/31/98 $356.45 $239.99 $288.98
7/31/99 $303.93 $284.55 $359.40
10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information regarding beneficial
ownership of Common Stock as of October 25, 1999, by each person or entity
known to the Company who owns of record or beneficially five percent or more
of the Common Stock, by each named executive officer and director nominee and
all executive officers and director nominees as a group.
<TABLE>
<CAPTION>
Number of Shares Percentage of
of Outstanding Common
Name Common Stock(1) Stock(1)
---- ---------------- ------------------
<S> <C> <C>
Fidelity Research and Management
Corporation......................... 3,266,000 11.6
Massachusetts Financial Services..... 3,255,746 11.5
Bryan C. Cressey(2)(4)............... 351,587 1.2
Paul M. Olson(2)..................... 456,014 1.6
George C. Graeber(2)(5).............. 86,558 *
David R. Harden...................... 443,248 1.6
Myron S. Gelbach, Jr. (2)(3)......... 42,123 *
Michael F.O. Harris(2)(3)............ 21,448 *
Glenn Kalnasy(2)..................... 23,056 *
Peter Sheehan(6)..................... 50,625 *
Richard C. Tuttle(2)(7).............. 29,589 *
Normand Bourque(8)................... 133,140 *
All executive officers and director
nominees as a group (13 Persons).... 1,790,269 6.3
</TABLE>
- --------
* Represents less than 1%.
(1) Figures are based upon 28,217,965 shares of Common Stock outstanding as of
October 25, 1999. The figures assume exercise by only the stockholder or
group named in each row of all options for the purchase of Common Stock
held by such stockholder or group which are exercisable within 60 days of
October 25, 1999.
(2) Messrs. Cressey, Olson, Graeber, Gelbach, Harris, Kalnasy and Tuttle are
directors of the Company.
(3) Member of the Audit Committee.
(4) Includes 35,000 shares held by the Bryan and Christina Cressey Foundation
(the "Foundation"). Mr. Cressey is the President of the Foundation and may
be deemed to be a beneficial owner of the Common Stock of the Company
owned by the Foundation, but Mr. Cressey disclaims any such beneficial
ownership.
(5) Includes 57,558 shares covered by options.
(6) Includes 50,625 shares covered by options.
(7) Includes 11,379 shares covered by options.
(8)Includes 131,640 shares covered by options.
DIRECTOR AND OFFICER AND TEN PERCENT STOCKHOLDER SECURITIES REPORTS
The federal securities laws require the Company's directors and officers,
and persons who own more than ten percent of the Company's Common Stock, to
file with the Securities and Exchange Commission, the New York Stock Exchange
and the Secretary of the Company initial reports of ownership and reports of
changes in ownership of the Common Stock of the Company.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year 1999, all of the Company's
officers, directors and greater-than-ten-percent beneficial owners made all
required filings.
11
STOCKHOLDER PROPOSALS
Proposals of stockholders to be presented at the 2000 Annual Meeting of
Stockholders must be received by the Secretary of the Company by July 4, 2000
to be considered for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. It is anticipated that the 2000 Annual Meeting
will be scheduled for December 5, 2000.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not know
of any business to come before the Annual Meeting other than the matter
described in the notice. If other business is properly presented for
consideration at the Annual Meeting, the enclosed Proxy authorizes the persons
named therein to vote the shares in their discretion.
SOLICITATION OF PROXIES
Solicitation of the Proxies may be made through officers and regular
employees of the Company by telephone or by oral communications with some
stockholders following the original solicitation period. No additional
compensation will be paid to such officers and regular employees for proxy
solicitation. Expenses incurred in the solicitation of Proxies will be borne
by the Company, including the charges and expenses of brokerage firms and
others of forwarding solicitation material to beneficial owners of Common
Stock. In addition to use of the mails, Proxies may be solicited by officers
and employees of the Company in person or by telephone.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report for the fiscal year ended July 31, 1999,
including the financial information included therein, has been filed with the
Securities and Exchange Commission and is incorporated in this Proxy Statement
by reference.
12
CDTO4B DETACH HERE
PROXY
CABLE DESIGN TECHNOLOGIES CORPORATION
For Annual Meeting of Stockholders - December 7, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul M. Olson and Kenneth O. Hale, and each or
any of them, as the true and lawful attorneys of the undersigned, with full
power of substitution and revocation, and authorizes them, and each of them, to
vote all the shares of capital stock of the Corporation which the undersigned is
entitled to vote at said meeting and any adjournment thereof upon the matters
specified below and upon such other matters as may be properly brought before
the meeting or any adjournments thereof, conferring authority upon such true and
lawful attorneys to vote in their discretion on such other matters as may
properly come before the meeting and revoking any proxy heretofore given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE
--- ---
PROPOSAL IN ITEM 2 AND AUTHORITY WILL BE DEEMED GRANTED UNDER PROPOSAL 3.
[SEE REVERSE] CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE]
SIDE SIDE
<TABLE>
<S> <C>
[Vote by Telephone] [Vote By Internet]
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement/Prospectus and Proxy Card. Statement/Prospectus and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). For http://www.eproxyvote.com/cdt
shareholders residing outside the United
States call collect on a touch-tone phone 3. Enter your 14-digit Voter Control Number
1-201-536-8073. located on your Proxy Card above your name.
3. Enter your 14-digit Voter Control Number 4. Follow the instructions provided.
located on your Proxy Card above your name.
4. Follow the recorded instructions.
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://ww.eproxyvote.com/cdt anytime!
</TABLE>
Do not return your Proxy Card if you are voting by Telephone or Internet
CDT04A DETACH HERE
[X]Please mark
votes as in
this example
<TABLE>
<S> <C>
1. To elect a Board of Directors for the ensuing year.
Nominees: (01) Bryan C. Cressey, (02) Paul M. Olson, FOR AGAINST ABSTAIN
(03) George Graeber, (04) Michael F.O. Harris, 2. To elect Arthur Andersen LLP as [ ] [ ] [ ]
(05) Glenn Kalnasy, (06) Richard C. Tuttle auditors for the fiscal year ending
FOR WITHHELD July 31, 2000.
[ ] [ ]
3. To transact such other business as may properly come
[ ] before the meeting.
--------------------------------------
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
(If signing as attorney, executor, trustee or guardian,
please give your full title as such. If shares are held
jointly, each holder should sign.)
</TABLE>
Signature: Date: Signature: Date:
